Democrat John Kitzhaber stopped short of declaring victory Wednesday, but the vote count shows he will win a history-making third term as governor, and his Republican opponent, Chris Dudley, conceded defeat.

Once again, heavily Democratic Multnomah County played the crucial role in a statewide race by delivering enough votes to swing the tally toward Kitzhaber and away from Dudley, who was coming up just short in his bid to become the first GOP governor of Oregon since 1987.

Kitzhaber scheduled a 10 a.m. news conference for Thursday morning in Portland at Tanner Springs Park at Northwest 10th and Marshall Street. His spokeswoman, Jillian Schoene, said Kitzhaber wanted to wait for Multnomah County to finish counting its ballots Wednesday night.

"It's great news," Schoene said after The Oregonian projected that Kitzhaber would win. "We're cautiously optimistic.

Dudley acknowledged Wednesday evening he had lost, summoning reporters to the El Ranchito Mexican restaurant in Lake Oswego. He wished Kitzhaber luck and turned away questions about why he came up shy.

"We haven't had time to let the dust settle," Dudley said. He added that he hopes Kitzhaber will take up the idea of visiting all 36 counties each year, as he did during the campaign, and stressed that the message he heard was that voters want Republicans and Democrats to work together.

He declined to answer questions about whether he would run for office again. "Right now," he said, "I'm just going inside and probably have a margarita and worry about all of that later."

For Kitzhaber, part of the attractiveness of seeking an unprecedented third term as governor was the prospect of working with a strong Democratic majority in the Legislature. But just as voters were narrowly returning him to office in the face of a strong national wave for the Republicans, they also were giving GOP legislative candidates victories in several key races.

Kitzhaber, who faced a GOP legislative majority when he was governor from 1995 to 2003, now must deal with split chambers. Several races remained too close to call late Wednesday, but the mostly likely result appears to be a 30-30 split in the House and a 16-14 edge for Democrats in the Senate.

Oregon Republican Chairman Bob Tiernan charged that Kitzhaber would have trouble reaching across party lines and predicted "an incredible mess" in Salem. But Senate Revenue Chairwoman Ginny Burdick, D-Portland, said Kitzhaber had the experience needed to help steer state government as it grapples with a projected two-year $3.2 billion budget shortfall.

Oregonian reporter Betsy Hammond on the race for Governor.

Several Salem insiders said the incoming governor does have one advantage in a closely divided Legislature: he can urge legislators to stick to the major problems at hand and avoid pursuing divisive agendas doomed to fail anyway.

"There should be an opportunity for the moderates to surface and focus on policy and not partisan issues," said Sen. Frank Morse, R-Albany.

This was the closest governor's race in Oregon since 1956, when Democrat Robert Holmes beat Republican Elmo Smith by 8,599 votes, or just over 1 percent. And it followed the pattern of several close statewide races in recent years: the Republican leads on election night only to see it whittled away as populous Multnomah County struggles to count its massive haul of ballots.

Kitzhaber didn't take the lead in the vote count until just before 6 p.m. Wednesday. Earlier in the afternoon, based on county-by-county voting trends, The Oregonian projected that Kitzhaber will win a slim victory of 49 percent to 48 percent. The margin for an automatic recount is less -- 0.2 percent.

Kitzhaber was grabbing about 70 percent of the vote in Multnomah County, which was the chief target of a furious Democratic get-out-the-vote effort in the days running up to the election. The push was so successful that more than 91,000 ballots were turned in on Election Day in Multnomah County, exceeding the 87,429 ballots turned in on Election Day two years ago when Barack Obama won a landslide presidential victory in Oregon.

The surge slowed down the vote count, leading to a drawn-out drama with Kitzhaber nipping away at Dudley's lead throughout the day. "If you get that many ballots on Election Day, it's just going to take a long time to get through," said Eric Sample, spokesman for the county elections office.

"We basically ran a presidential (voter-turnout) program in a non-presidential year," said Kevin Looper, who helped guide the effort for the Kitzhaber campaign. Several labor unions and progressive groups, ranging from the Oregon League of Conservation Voters to Basic Rights Oregon, coordinated efforts to turn out voters.

The Oregon Republican Party ran its own phone banks that targeted potential Dudley voters and conducted canvassing in Washington and Clackamas counties. Republicans did turn out to vote in higher percentages. But the much more numerous Democrats still cast more ballots in Tuesday's elections, forcing disappointed GOP strategists to acknowledge the sting of losing the governorship yet again.

"For a Republican in this year who has run such a good race and coming up short, that's disappointing," said Portland consultant Dan Lavey, who helped advise Dudley on his candidacy. "I just thought he'd do a little better in the tri-county area than he did."

Looper, the Democratic strategist, said Democrats felt a strong sense of relief to help Kitzhaber eke out a narrow victory.

"There was definitely a red tide flowing from east to west across the nation," he said, "and we had just enough sandbags to hold the water at bay here."

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